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Wednesday, 25 September 2002
Page: 4944

Senator Brown asked the Minister representing the Minister for the Environment and Heritage, upon notice, on 21 August 2002:

With reference to Australia's Third National Communication on Climate Change 2002:

(1) Which `known projects' are included in the projections for stationary energy sector emissions.

(2) What other `significant energy intensive major projects' are projected or planned which have the potential to increase the projection.

(3) (a) What proportion of electricity generation is generated from gas at present; and (b) what factors will influence the assumed 13 percent contribution of gas by 2010.

(4) (a) What effect will Basslink have on greenhouse gas emissions; and (b) will it have the effect of increasing brown coal emissions and reducing gas generation.

(5) (a) How much hydro-electricity was generated in 1990; (b) how does this compare with the baseline amount used for the mandatory renewable energy targets (MRET); and (c) how does this affect the projected savings under MRET in 2010.

(6) What measures will the Minister take to reform the energy market so it does not favour brown coal for electricity generation.

Senator Hill (Minister for Defence) —The Minister for the Environment and Heritage has provided the following answer to the honourable senator's question:

(1) The projections for stationary energy published in the Third National Communication were derived from a combination of top down and bottom up models.

The top down models used in developing the projections use aggregated data, and therefore do not account explicitly for individual projects.

The bottom up modelling used in the projections utilise the energy demand projections from ABARE that were current at the time the work was undertaken (Australian Energy: Market Developments and Projections to 2014-15, ABARE Research Report 99.4). Inclusion of major projects is therefore consistent with the listing of key major projects assumptions set out in Table 8 on page 38 of ABARE Research Report 99.4.

(2) The Third National Communication reports a `high scenario' for stationary energy emissions at 2010 of 145% of 1990 emissions. This estimate is consistent with a range of `significant energy intensive major projects' beyond those included in the `best estimate' projection. However, given the nature of the projections methodology, a list of potential additional major projects associated with the high scenario is not available.

(3) (a) Currently, the share of electricity generated using gas is estimated at around 8 per cent. (b) Factors influencing the 13 per cent contribution of gas in electricity by 2010 include the underlying rate of growth in demand for energy, commercial considerations relating to decisions on electricity infrastructure (in part driven by the price of gas, and hence the extent of investment in new gas fields and supply infrastructure), and the impact of policies on commercial decisions relating to energy infrastructure.

(4) (a) Modelling of the impacts of Basslink on greenhouse gas production in the National Electricity Market indicate a range of possible outcomes, from a small reduction, to a small increase, in the order of 0.5%, depending on the scenario chosen. (b) A Joint Advisory Panel (JAP), which was appointed by the Victorian, Tasmanian and Commonwealth Governments to undertake an integrated assessment of the environmental, economic and social effects of Basslink, concluded that the modelling and range of scenarios considered was appropriate.

The JAP also concluded that it is not possible to be more definitive as to the actual outcome, as it would depend on a wide range of factors including electricity demand growth, developments in the electricity market and in electricity generation and transmission, and also developments in greenhouse policies and programs.

(5) (a) According to Australian Energy: Projections to 2014-15: ABARE Research Report 99.4, there was 55.6 PJ (15 444 GWh) of gross electricity generation from hydro sources in 1990. (b) The 1990 figure is not comparable to the 1997 Eligible Renewable Power Baseline used for the MRET. The 1997 Baseline is representative of the amount of renewable generation for `typical' conditions for 1997, given the configuration of participating power plants as at 1 January 1997. (c) The 1990 figure has no impact on the projected savings under MRET at 2010.

(6) On 8 June 2001, the Council of Australian Governments (COAG) agreed to a national energy policy framework with a key national energy policy objective of mitigating local and global environmental impacts, notably greenhouse impacts, of energy production, transformation, supply and end use.

The Ministerial Council on Energy (MCE), which is chaired by the Commonwealth, is currently considering a number of priority issues as part of its ongoing work program to deliver on the framework objectives.

The national energy policy framework is being supported by a Commonwealth instigated high-level independent strategic review of medium to longer-term energy market directions.

This strategic review is assessing among other things the relative efficiency and cost effectiveness of options within the energy market to reduce greenhouse gas emissions from the electricity and gas sectors. A final report on the Review's findings is expected to be released in December 2002, and its recommendations are expected to guide future energy policy decision-making.